Tag Archives: Inflation

National discussions of crucial importance to ordinary citizens – such as funding for scientific and medical research, bailouts of financial institutions and the current Republican tax proposals – inevitably involve dollar figures in the millions, billions and trillions. Unfortunately, math anxiety is widespread even among intelligent, highly educated people. Complicating the issue further, citizens emotionally undeterred by billions and trillions are nonetheless likely to be ill-equipped for meaningful analysis because most people don’t correctly intuit large numbers. Happily, anyone who can understand tens, hundreds and thousands can develop habits and skills to accurately navigate millions, billions and trillions. Stay with me, especially if you’re math-averse: I’ll show you how to use school arithmetic, common knowledge and a little imagination to train your emotional sense for the large numbers shaping our daily lives. Estimates and Analogies Unlike Star Trek’s Mr. Spock, scientists and mathematicians are not exacting mental calculators, but habitual …

You hear it all the time: you should make sure your retirement savings at least keep pace with inflation. But what is inflation and how does it really affect your retirement savings? Let’s explore. In simple terms, inflation is defined as an increase in the general level of prices for goods and services. Deflation, on the other hand, is defined as a decrease in the general level of prices for goods and services. If inflation is high, at say 10% – as it was in the 1970s – then a loaf of bread that costs $1 this year will cost $1.10 the next year. Inflation in the United States has averaged around 3.29% from 1914 until 2016, but it reached an all-time high of 23.70% in June 1920 and a record low of -15.80% in June 1921. Most will remember the high inflation rates of the 70s and early 80s …